Correlation Between Sinomach General and Guangzhou Restaurants
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By analyzing existing cross correlation between Sinomach General Machinery and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Sinomach General and Guangzhou Restaurants and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sinomach General with a short position of Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach General and Guangzhou Restaurants.
Diversification Opportunities for Sinomach General and Guangzhou Restaurants
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinomach and Guangzhou is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach General Machinery and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants and Sinomach General is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sinomach General Machinery are associated (or correlated) with Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Sinomach General i.e., Sinomach General and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Sinomach General and Guangzhou Restaurants
Assuming the 90 days trading horizon Sinomach General Machinery is expected to generate 1.5 times more return on investment than Guangzhou Restaurants. However, Sinomach General is 1.5 times more volatile than Guangzhou Restaurants Group. It trades about 0.03 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about -0.03 per unit of risk. If you would invest 1,289 in Sinomach General Machinery on September 28, 2024 and sell it today you would earn a total of 250.00 from holding Sinomach General Machinery or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sinomach General Machinery vs. Guangzhou Restaurants Group
Performance |
| Timeline |
| Sinomach General Mac |
| Guangzhou Restaurants |
Sinomach General and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach General and Guangzhou Restaurants
The main advantage of trading using opposite Sinomach General and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach General position performs unexpectedly, Guangzhou Restaurants can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Guangzhou Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.| Sinomach General vs. Kweichow Moutai Co | Sinomach General vs. Contemporary Amperex Technology | Sinomach General vs. G bits Network Technology | Sinomach General vs. BYD Co Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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